Report on best practices of oil and gas

 

Best Practices - Oil and Gas

Best practices are meant to give insight into existing strategies

The World is not complex but competitive also, the surviving in competition is not an easy proposition. Simplicity of business is becoming complex in nature and difficult to survive with the passage of time. There are limited choices in view of the demand and the natural resources available. We have also responsibility for the world we live, the resources we use, the universe with life and the future and future generations to come.

Practice makes a man perfect best practice enlightens for sustainability

Introduction

The World is not complex but competitive also, the surviving in competition is not an easy proposition. Simplicity of business is becoming complex in nature and difficult to survive with the passage of time. There are limited choices in view of the demand and the natural resources available. We have also responsibility for the world we live, the resources we use, the universe with life and the future and future generations to come.

We have to make sure that we use resources in the most judicious way. We also make sure, we protect our planet, its resources and it remains sustainable for future generations. The onus is on the individuals as well on the organizations and companies involved in many economic activities, particularly in exploring and refining the natural resources.

The companies are accountable for protecting environment and sources of life such as water, air land, organisms and communities. The Success depends on protecting the resources, their optimal use, accountability, timeliness and participation in community work for show our concern and care.

The technology plays a significant role in achieving these goals with competitive edge. With the development of technology, nano-technology and IT industry the success rate has enhanced to a new degree and promises a great hope for the future.

In order to be competitive, the companies involved in technology developed certain practices based on the experience and implement them for success. The practices become the benchmark of success. In nutshell, we call them Best Practices. What we learn from the past, our present is based on it. and secure our future by exercising our learning. It establishes the value system of an organization in terms of best practices where companies follow these practices to succeed and establish themselves for sustainable future growth.

In other words, in the world of technology best practice can be defined-A best practice is a method or technique that has consistently shown results superior to those achieved with other means, and that is used as a benchmark.

In addition, a "best" practice can evolve to become better as improvements are discovered. Best practice is considered a business buzzword, used to describe the process of developing and following a standard way of doing things that multiple organizations can use.

Best practices are used to maintain quality as an alternative to mandatory legislated standards and can be based on self-assessment or benchmarking. Best practice is a feature of accredited management standards such as ISO 9000and ISO 14001etc.

Some consulting firms specialize in the area of Best Practice and offer pre-made 'templates' to standardize business process documentation.

A key strategic talent required when applying best practice to organizations is the ability to balance the unique qualities of an organization with the practices that it has in common with others.

Good operating practice is a strategic management term.

More specific uses of the term include good agricultural practices, good manufacturing practice, good laboratory practice, good clinical practice and good distribution practice.

Best practices are used in nearly every industry and professional discipline. Areas of note include information technology development, such as new software, but also in construction, transportation, business management, sustainable development and various aspects of project management.

Best practices are also used in healthcare to deliver high-quality care that promotes best outcomes. Best practices are used within business areas including sales, manufacturing, teaching, computer programming, road construction, health care, insurance and public policy. The following examples will help us learn how best practice evolves and help us achieve the desired results consistently.

Overview of Best Practice in Public Policy

Best Practices Theory in Public Policy- Best Practice is a form of program evaluation in public policy. It is the process of reviewing policy alternatives that have been effective in addressing similar issues in the past and could be applied to a current problem.

1. Develop Realistic Expectations

Eugene Bardach advises the policy analyst that it is important to maintain realistic expectations when seeking a "best practice" in public policy analysis because the practice may not be solving the problem at all and it may instead produce unfavorable results.

Because a practice seems to be tailored to a specific policy problem and also based on solid research, it does not necessarily mean it is creating good results. However the research can produce thought-provoking concepts on what can and cannot work when put into practice.

2. Analyze Smart Practices

In policy analysis a "best" or "smart" practice is a clear and concrete behavior that solves a problem or achieves a goal. Smart practices take “advantage” of an idle opportunity at a low cost and little risk.

Eugene Bardach refers to this as finding the free lunches. These are opportunities for creative policy improvements such as "cost-based pricing" or "input substitution" that have the possibility to generate public value at a very low cost.

Breaking loose from conventions and challenging assumptions can also be way to take advantage of an idle opportunity. An example of this is the highly controversial practice of the government contracting out a community goods or service to nonprofits or the private sector. This challenges the assumption that a community goods or service must be financed through taxation and delivered by government employees.

3. Observe the Practice

The primary mechanism in a "smart" practice is the ability or the means of achieving a goal in a cost-effective manner. The secondary mechanisms include implementing features, supportive features and optional features. It can be very complicated to separate between the functions in getting the mechanism to work and the features that support those functions.

Eugene Bardach recommends when adapting smart practices for another source, it is important to identify the core essence of the practice while allowing flexibility for how it is implemented so it remains sensitive to local conditions. Robust smart practices are adaptable to various conditions, have many operational features, and can employ similar but diverse ways to achieve their goals.

4. Describe Generic Vulnerabilities

In addition to the reasons why a smart practice might succeed, an analyst should describe potential vulnerabilities that could lead a smart practice to fail—these weaknesses are "generic vulnerabilities”. Two types of vulnerabilities are worth particular attention: 1) poor general management capacity, which makes it more difficult to effectively implement a smart practice, and 2) weaknesses inherent to the practice itself. Policymakers must develop safeguards in order to minimize the risk of generic vulnerabilities.

5. But Will It Work Here?

The final step in identifying an appropriate "best practice" for a policy problem is to ensure that the context from which the practice is derived is comparable to the context in which it will be applied.

Risks to implementing the selected "best practice" in the applied context as well as what support structures can be put in place need to be anticipated in order to maximize the likelihood of success.

If utilizing a pilot or demonstration program "best practice" the success of that practice needs to be discounted in order to account for the better than average favorable conditions pilot and demonstration programs usually operate under.

These conditions include increased enthusiasm, advantageous political and economic conditions, and less bureaucratic resistance due to the lack of permanency in pilot programs.

Finally, when considering implementing a "best practice" on a wide scale one must be aware of the 'weakest link' sites with minimal to no resources and how those sites will be supported in order to create the desired policy outcomes.

Examples of "Best/Smart" Practice Evaluation in Public Policy

There are many examples of the use of "best"/"smart" practice evaluations in Public Policy.

1).STEM Program Explanation from Angela Baber's report to the NGA- To make a Higher Education Program successful and follow the best practices, the NGA has identified science, technology, engineering, and mathematics (STEM) as important skills that need to be developed in community colleges in order to create a strong work force.

The Best Practices were established such as - Engage business to help ensure that community colleges meet regional STEM-skill needs. Use community colleges to support new models of STEM education. Reward community colleges and students for STEM course-completion. Ensure that community colleges support more effective mathematics remediation. Require that community college STEM credits and credentials are transferable."

2). One example is the tutoring program for children in grades 1-3 called Reading One-to-One. The program from Texas includes one on one tutoring with supervision and simple structured instruction in phonemic awareness. Phonemic awareness is one highly regarded predictor of how well a child will learn to read in the first two years of school.

3). In September 2013 at the New York State Conference for Mayors and Municipal Officials, successes, ideas and information on "best" practices were shared among government peers. A "best" practice that was highlighted at the conference was how Salinas, California is rebuilding their economy by engaging technology companies with their agricultural business in order to grow jobs. Salinas is taking advantage of an idle opportunity.

4). The U.S. Environmental Protection Agency (EPA) produces a document called The Clean Energy-Environment Guide to Action. It is designed to share successful state "best practices" to determine what is most suitable for them to use in generating clean energy policies and programs.

The guide includes 16 clean energy policies and programs that offer opportunities for states to save energy, improve air quality, lower greenhouse gas emission and increase economic development.

Through Natural Gas STAR, a voluntary EPA program, participating companies implement approximately 150 cost-effective technologies and practices that reduce emissions of air pollution from oil and gas development.

5). An example of a successful "best practice" from the guide is "Building Codes for Energy Efficiency". This practice is to use building energy codes to set requirements that establish a minimum level of energy efficiency standards for residential and commercial buildings.

6). The technology and practices in the helicopter industry continues to evolve. This has led to the innovations that improve performance and address safety issues. The purpose of this Best Practice is to establish a minimum guideline for Helicopter supported operations in the Canadian Helicopter industry that will enable companies to operate in a manner that ensures the safety of all personnel and public engaged in these types of operations.

It is identified that Standard Safe Operating Procedures and criteria of helicopter operators engaged in Oil and Gas Land exploration flights. Identification of known hazards and mitigations Federal, Provincial and Territorial regulations pertaining to Helicopter Operations engaged in Land Seismic Operations.

7). The OGR is chartered to analyze the industry’s current and potential use of existing RFID technology and identify programs to accelerate its adoption. Thinking forward, OGR will strive to anticipate the industry’s needs and use our voice to influence the direction and focus of commercial RFID technology development.

The goal is to enable the use of RFID technology by oil & gas companies. The Oil & Gas RFID Solutions Group Identifies high-value opportunities and develop their RFID solutions Share expertise to confirm RFID’s viability and advance its utilization in oil and gas applications, construction management. These solutions based on best practices can also be used in Down hole Actuation, Drill String Validation, Dynamic KPI Data, Hazardous Material Disposal, Inventory & Asset Control Maintenance, Tracking and Product Lifecycle Management.

8). Earthworks has compiled information regarding various best, better or alternative practices that can be used to minimize impacts during oil and gas operations in the areas- Alternatives to pits, Closed-loop drilling systems, Directional drilling, Flareless (green) completions, Minimizing waste, Surface disturbance, Visual impacts, Noise and Air pollution.

Best Practices Challenges in Oil and Gas Industry (A Canadian case in view)

Oil and gas production regulations vary in stringency from state to state. If states with the most rigorous (in terms of protecting communities and the environment) rules – the “best practices” -- still have an active oil and gas industry, it demonstrates that companies can be better actors and still be competitive.

When these best practices are first codified industry will often challenge the new rules. They invariably argue that the cost of implementing the best practices will force them to go elsewhere.

There are some criticisms of the term "best practice." Eugene Bardach claims that the work necessary to deem and practice the "best" is rarely done. Most of the time, one will find "good" practices or "smart" practices that offer insight into solutions that may or may not work for a given situation.

Scott Ambler challenges the assumptions that there can be a recommended practice that is best in all cases. Instead, he offers an alternative view, "contextual practice," in which the notion of what is "best" will vary with the context.

The terms “best practices” (BPs) and “Best Management Practices” (BMPs) appear to be used interchangeably in the literature. Some use the term “best practices”: Were the standards applied in a given activity indeed the “best” practice?

Who determined that a given approach was a “best practice”? Is “best” the same in all circumstances? Are the criteria specific to the activity? And are the criteria specific to a geographic region? One person preferred to refer to activity standards as “application of the best available technology economically available” (BATEA).

However, the best available technology—at least with respect to seismic exploration activity—is not always applied. This is because, although it might be economically available, it would not result in an accepted level of local economic benefits.

Another definition is provided by the Canadian Association of Petroleum Producers (CAPP), which suggests that “best management practices” are “management practices or techniques recognized to be the most effective and practical means to develop the resource, while minimizing adverse environmental and other negative effects.” (Peters, M., 2007)

There are differing views as to whether the term “best practice” should be limited to a practice that goes beyond what is required of the industry in legislation. An important notion to keep in mind is that this definition is fluid over time. That is, as our knowledge and understanding of the relationship between social norms, activities and the environment change, so too will the dimensions of the ecological footprint, and complementary “Best Practices”change.

The oil and gas industry’s best practices in the North are continually being developed in various ways in accordance with public response and regulator concerns, new standards and guidelines, changes in land use policy, environmental conditions and technological innovation. A wide variety of factors affect the adoption of these practices, including environmental, social and economic considerations particularly, the activities associated with exploration and production.

The adoption of best practices in the North (“north” meaning primarily Canada north of the 60th parallel) needs to take into account a wide variety of factors, including environmental, social and economic considerations. Also, the extent to which the socio-economic considerations of northern businesses and contractors are included in that process is an area of interest to the industry, regulators and contractors alike.

Processes for Establishing Best Practices (A Canadian case in view)

The literature search produced little in the way of documentation on the procedures followed for initiating, developing and implementing best practices in the North.

The views seemed to depend on the level of experience with the development of best practices. following the procedures established by the Canadian Standards Association for developing new standards (CSA, 2009). CAPP conducted a study of evolving practices that may be adopted by its members and which may develop into best practices (CAPP, 2004).

For example, the Environmental Impact Assessment Process, established under the Inuvialuit Final Agreement (IFA), requires that all development in the Inuvialuit Settlement Region (ISR) of the Northwest Territories and the Yukon North Slope be screened for potential environmental impacts.

Development proponents submit project descriptions to the Environmental Impact Screening Committee (EISC) for screening. In their project submissions, proponent oil and gas exploration companies outline the steps—which may be defined as best practices—that they will take to minimize potential environmental effects.

The EISC has the authority to recommend the inclusion of these best practices or other actions by the exploration companies in the authorizations or permits necessary to allow the exploration program to proceed. When these recommendations are included in the authorizations, they become conditions that are enforceable.

Thus there is in the EISC process a formalized means of acknowledging, implementing, monitoring and enforcing best practices.

The Environmental Impact Review Board (EIRB), also established under the IFA, may also issue such recommendations.

There is a similar situation with the Mackenzie Valley Environmental Impact Review Board (MVEIRB) established under the Mackenzie Valley Resource Management Act, which applies in the Northwest Territories outside of the ISR. The MVEIRB conducts screenings or reviews of proposed oil and gas exploration projects.

At the conclusion of a screening or review, the Board may make recommendations as to how the project is to be carried out to reduce potentially negative environmental effects. Such recommendations might be considered best practices which, if included as conditions of permits authorizing the exploration work to proceed, would be subject to implementation, monitoring and enforcement.

In the case of YESAA considerations of projects, both environmental and socio economic impacts must be addressed and recommendations to a decision body may include both. In the Yukon then, it is possible that improved ways of carrying out an exploration project (best practices) may be recommended for both environmental and socio-economic aspects of a project.

Implementation of Best Practice

Successful application of sound practice in one portion of the circumpolar north, Russia, for example, may end up being applied by that same company in northern Canada (L. Callow, pers. comm., 2008). However, it should be acknowledged that sound practices in one northern country or region may not be directly applicable to another, given differences in geology, permafrost, soil, vegetation, and local climate and weather conditions.

This may mean that efficient use of time has resulted in cost savings, as well as less impact on the tundra environment, a desirable outcome in its own right that results in positive public relations for that company. The process by which the Recommended Best Practices for Drilling Waste Management (ESRF, 2004) came about may serve as a useful example.

There are other companies initiate, develop and impliment best practices, the IT companies are very much involved in best practices to offer better and cost effective solutions to the companies involved in exploration and refining. To name the few examples.

Cisco Example- The role of technology in finding, extracting, and processing oil and gas is causing a fundamental shift in the way energy companies approach their information technology (IT) strategies . With the advent of remote sensors, nanorobots, Big Data analytics, and machine -to- machine (M2M) networks.

IT is no longer just a provider of basic commodity information services. Rather, information technology has become a platform for innovation — and is fast becoming a leading best practice for creating core business value in the oil and gas industry.

Best Practice SAP Solution in Oil and Gas Industry

The challenges of the Oil and Gas Industry are the business processes. The SAP`s solutions support those processes such as Indirect Supply Chain (MRO), Logistics & Procurement, Reliability & Asset, Management EH&S & Risk Upstream Operations, Hydrocarbon Supply Chain, Finance & Capital Management to mention few. These solutions help in Increasing Accuracy of Decisions, Managing Data, Laying the Foundation for better Decision Making, Reporting & Analytics, Enhancing Processes and Managing Change for Productivity and Managing IT Infrastructure.

Edgewater Ranzal is an Oracle Platinum Partner providing premier consulting services for Oracle Business Analytics solution using Oracle Enterprise Performance Management (EPM) and Business Intelligence (BI) technology.

Their practice supports all of Oracle's Hyperion applications such as Hyperion Strategic Finance (HSF), Essbase and Business Intelligence (BI), Hyperion Planning (HP), Hyperion Financial Management (HFM), Financial Data Quality Management (FDM), Hyperion Profitability & Cost Management (HPCM) , Data Relationship Management (DRM).

Conclusion

The conducts of Best Practices

To succeed in best practice follow the best practice principles, intention and set high bar that benefits all. Also involve all and value everyone for the best outcome of best practices.

The key learning of Best Practices is to tailor current practices that are in the world to the specific situation you are looking to solve. Best practices are meant to give insight into existing strategies

The best management practices have been important to improving water quality relating to nonpoint source pollution of fertilizers in agriculture as well as the identification and adoption of best practice for controlling salinity.

Some oil and gas companies innovate and improve their systems to cut costs. By cutting air emissions, reducing water use, controlling erosion, and employing other practices that increase revenue, they also reduce impacts on communities and the environment.

When industry discovered a better (i.e., more efficient and cost effective) way of carrying out an activity, such as seismic exploration, then that better practice is initiated and developed. for the future use.

The best storage and handling of food products, proper storage and transport safely to enhance the life of products particularly fruits, vegetables and staple food . The most of items are seasonal items and have short life span. This will reduce the waste. At this time the waste is almost 30% for not having the timely storage and maintenance of such seasonal and time bound products.

This approach to best practice focuses on fostering improvements in quality and promoting continuous learning.

Any kind of existing or new practices that will reduce the time, intensity or duration of the footprint or effect on the land base and/or users of that land base.

It has also been suggested that “best practices” should include efforts to minimize impact and provide benefits in terms of social and economic opportunities.

While the development of best practices is generally seen by government and industry as beneficial to the overall management and operation of the industry and protection of the environment, the process by which they are developed, accepted and adopted has generally not been well understood by the parties affected.

The best practice is to develop better communication with the affected parties to understand the overall management and operation and remove any confusion whatsoever. The well intention and clarity is the key to success in such controversial matters. Best practice can play a significant role in resolving such issues.

If the best practices are written into or initially agreed to by the proponent on a voluntary basis, such best practices then become mandatory and enforceable. The best practice is at least monitored to ensure compliance.

Once one company adopted a higher standard of performance or an improved practice, then other companies are “obliged” to come up to that level. The following approach gives the valid reason to do so.

A best practice may be adopted by other companies in a given region because one company decides for its own reasons to move to a better operating practice, thus creating subtle pressure for other companies to do the same.

Improving logistics processes is an area that organizations are constantly trying to master.

Rather than 1000 deliveries per week to a site, imagine the impact of reducing that to 500 deliveries. This can be done by simply planning better and the impact of this logistics planning can improve safety, increase productivity and save money by adopting best practices.

When a business processes 700000 barrels per day, 1% increase in reliability would yield an additional 7000 barrels. Reducing decline and pulling small margin forward is very attractive, and reliability improvements are a very tangible way to effectively achieve this.

The Oil & Gas business is one in which price can’t be impacted, only production throughput to impact on margins. SAP has a powerful but complex suite of capabilities which can be daunting to understand and apply.

SAP`s EHS can Manage Risk and Safety and collecting job risk matrices for safety, environment and production. SAP solution can assess the risk and can do job safely. It can also indentify and manage statutory and other critical work. It offers safety for contractors on major projects and shutdowns.

Best Practice of Oracle

 There are hundreds of upstream, midstream, downstream, oilfield service and integrated oil companies leverage Oracle's Hyperion Strategic Finance and Crystal Ball for long range planning of existing business as well as potential projects and acquisitions.

In today`s world developing best practices and implementing them successfully to improve the business and add to the margins is the great success of best practices. At the end this is going to add to the performance, accountability, timeliness, better communication, improved relations and echo sustainability for future generations.

Sources-

1. Bogan, C.E. and English, M.J. (1994). Benchmarking for Best Practices: Winning Through Innovative Adaptation. New York: McGraw-Hill.

2. Nash, J. and Ehrenfeld, J., 1997: "Codes of environmental management practice: assessing their potential as a tool for change." Annual Review of Energy and the Environment 22, 487-535

3. Bardach, Eugene (2011). A Practical Guide for Policy Analysis: The Eightfold Path to More Effective Problem Solving. Thousand Oaks, CA: Sage. ISBN 9781608718429.

4. http://www.epa.gov/statelocalclimate/documents/pdf/guide_action_full.pdf

5. Baber, Angela. "Using Community Colleges to Build a STEM-Skilled Workforce". NGA Center for Best Practices.

6. http://www.esrfunds.org/pdf/175.pdf

7. http://www.h-a-c.ca/HAC_OGC_IBP_Feb_2010-1.pdf

8. http://www.motorolasolutions.com/web/Business/Sol...

9. http://www.earthworksaction.org/issues/detail/bes...